Regents of the University of Minnesota v. United States of America

Background

The dispute concerns environmental investigation and cost-recovery claims arising from the former Gopher Ordinance Works, a World War II facility that the United States owned and E.I. du Pont De Nemours and Company operated. After the Government transferred portions of the property to the Regents of the University of Minnesota, investigations identified releases of hazardous substances. The University conducted investigations from 2002 through 2017 after the United States Army Corps of Engineers declined to perform a full investigation. The University sought $3,361,215.61 in response costs under Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Minnesota Environmental Response and Liability Act (MERLA).

The Government brought its own CERCLA cost-recovery and contribution claims against the University. It asserted claims for internal United States Army Corps of Engineers costs, contractor costs, and Department of Justice attorney fees. The parties stipulated that the site was a CERCLA facility, that hazardous substances had been released, and that the relevant parties fell within CERCLA liability categories. The University and DuPont also stipulated to relevant MERLA facts, including their MERLA liability.

University’s claimed costs

The court held that the University’s $3,361,215.61 in investigation costs were recoverable response costs under CERCLA and MERLA. The investigations were performed under work plans reviewed or approved by the Minnesota Pollution Control Agency, and the agency determined that the response actions were reasonable and necessary. The court also ruled that the University is an instrumentality of the State of Minnesota and therefore qualifies as “the State” for CERCLA purposes. As a result, the defendants had the burden of showing that the University’s costs were inconsistent with the National Contingency Plan, which they did not meet.

The court rejected the defendants’ arguments concerning four investigations that also supported an environmental impact statement for gravel mining. The court concluded that the investigations were still necessary because they addressed known or suspected releases, were performed at the Minnesota Pollution Control Agency’s request and oversight, and were incorporated into the approved remedial investigation. The court also rejected the Government’s double-recovery argument concerning $732,695.84. It found that Dakota Aggregates had advanced future mining royalties that the University was required to repay, so the University ultimately bore the full cost. The court further held that defendants did not identify specific University costs that were improper litigation-support costs.

Government’s claimed costs

The court held that the Government had not shown that it was entitled to recover any response costs related to the site. It found that the United States Army Corps of Engineers’ internal activities focused on limiting the Government’s involvement and determining responsibility, rather than responding to the releases. The court also found that the Government’s contractor investigations were directed toward closing out the Corps’ potentially responsible-party determination rather than conducting the full investigation requested by the Minnesota Pollution Control Agency.

The court rejected the Government’s claim for $90,249.40 in Department of Justice fees incurred in prosecuting its CERCLA cost-recovery counterclaim. It concluded that the United States Army Corps of Engineers was not acting in an enforcement role at the site and that the claimed fees were litigation costs in response to the University’s lawsuit, not recoverable enforcement costs. The order also denied the Government’s request for contribution at summary judgment and stated that the Government had not shown entitlement to prejudgment interest.

Rulings and disposition

Judge David S. Doty granted the University’s motion for partial summary judgment. He ruled that the United States of America, the University, and DuPont are liable parties under CERCLA; that the University and DuPont are also liable parties under MERLA; that the University incurred $3,361,215.61 in reasonable and necessary response costs; and that defendants had not raised a genuine dispute over the recoverability or accounting of those costs. The court denied the Government’s motions for partial summary judgment and denied DuPont’s joinder motion.

The court denied as moot the University’s motion to exclude Wiley R. Wright and Robert M. Zoch. It denied without prejudice the University’s motion to correct the record and denied without prejudice the defendants’ motions to exclude David Heidlauf’s testimony; the order states those motions could be raised again during the bench trial. The court left allocation of past recoverable costs and responsibility for future response costs for trial.